Oil and natural gas daily review (May 02, 2014)

WTI oil prices declined on Thursday as crude inventories in the US soared to record high while Brent crude was pressurized by muted Chinese economic data and hopes of rebound in Libyan oil exports.

The U.S. Labor Department is expected to report 210,000 nonfarm payroll jobs were added in April, according to a Reuters survey of economists, which would be supportive for crude oil demand even as domestic inventories rose again last week.

In China, the world's second-largest oil consumer, April factory activity rose marginally but export orders fell, which reinforced worries that economic growth will continue to slow.

Adding further pressure on Brent, Libya's Zueitina oil port was said to have begun loading its first tanker of crude on Thursday after being closed for nearly 10 months

On the MCX, crude prices declined by 0.3 percent and closed at Rs.5999 /barrel.

EIA inventory update

The EIA is scheduled to release its weekly inventories report tonight at 8:00pm IST and US crude oil inventories is gained by 1.7 million barrels for the week ending on 25th April 2014.

Outlook

On an intraday basis we expect crude prices to trade on a negative note on record high inventories in the US. Besides, the bad economic data from China and restart of Libyan crude exports can exert downside pressure on prices.

On the MCX, crude prices are expected to trade on a weaker note taking cues from weak international markets